Identifying and characterizing lung progenitor cells and their signaling niches is crucial for understanding how a healthy lung is built and maintained, how alteration of development and maintenance pathways cause or contribute to lung disease, and how disease can be prevented and damaged lung tissue restored or replaced. Identifying and characterizing lung progenitor cells and their niches has been hampered by the complex three-dimensional structure of the lung and the lack of tools to mark, follow the fate, and manipulate gene expression in individual lung cells in vivo. Here we propose to develop such tools, by adapting for use in mouse lung the systematic genetic approaches and single cell resolution genetic tools ("clonal analysis") that have been used over the past decade to elucidate progenitor and stem cells and their signaling niches in the model organism Drosophila. We combine this in vivo approach with a high throughput in vitro approach that takes advantage of recent advances in genomics and microfluidics to characterize individual lung progenitor cells and their developmental responses to the signals identified in the in vivo experiments. This combined approach is general and applicable to progenitor cells throughout the lung and other mouse tissues, although we focus on the poorly characterized progenitor cells in lung mesenchyme. The specific aims are: To establish a general multi-color in vivo cell marking method to follow the fate of individual mouse lung cells, and to use this method to identify the number and types of progenitors cells in the mesenchyme of developing and mature mouse lung. To use high throughput in situ hybridization studies to localize all of the signaling and receiving centers in progenitor cell niches in the mouse lung; To determine the in vivo functions of the identified signaling and receiving centers in lung progenitor cell biology by constructing a library of transgenic mouse strains that can be used to create ectopic signaling centers and clonally inactivate each signaling pathway in the mouse lung; To establish a high throughput, microfluidic approach to isolate, propagate, profile, and assess the developmental potential of identified lung progenitor cells under defined culture conditions, and to use this to determine the number of molecularly and functionally distinct progenitor cell populations in lung mesenchyme; To establish methods for directing development of lung progenitor cells along specific lineages using the high throughput microfluidic approach to expose isolated, identified progenitor cells systematically to different concentrations, gradients, temporal patterns, and combinations of signaling molecules identified in the in vivo experiments.